Nigerian National Petroleum limited is currently concluding plan to make a maiden crude oil supply to the recently commissioned 650,000 barrel-per-day Dangote oil refinery with up to six cargoes of crude oil in December to be used in test runs according to various sources of information made available by Reuters.

This recent revelation is coming sequel to previous claims made by Dangote Refinery group’s executive director Devakumar Edwin disclosed to S&P Global that the plant is poised to make importation of crude oil to kick start its operation in October this year. Nigeria’s oil and condensates is currently at 1.67 million barrels per day and the African largest refinery is expected to gulp one third of this daily output if all things being equal.

Dangote Refinery Expects Diesel Production

Devakumar Edwin was in his recent interview in later September, 2023 with S&P Global Commodity Insight, disclosed that the refinery would receive its first crude cargo in two weeks’ time and would begin producing up to 370,000 barrels per day of diesel and jet fuel in October 2023. He further emphasized the readiness of the plant to being operation once the crude oil arrived.

“Right now, I’m ready to receive crude. We are just waiting for the first vessel. And so, as soon as it comes in, we can start.” Group Executive Director Devakumar Edwin disclosed

 NNPCL Crude Supply To Dangote Refinery

On the basis for the importation of crude oil, Mr. Edwin said that the refinery will start receiving its feed stock from Nigeria crude oil production in November as Nigeria National Petroleum Corporation Limited current crude oil production is already committed to another entity on a forward basis, causing a temporary delay. He said that the setback is momentary, and the refinery would soon run exclusively on Nigerian crude oil as of November 2023.

But contrary to the above projection as reported by Reuters, NNPC Limited has said that the corporation will kick start its first crude oil delivery to Dangote Refinery in December. One of the sources, an NNPC official, who declined to be named, specified six cargoes, or 200,000 bpd, would be supplied in December as part of a one-year deal, adding that volumes in future months would be supplied “based on mutual agreement and availability”.

The other sources said about 4-5 cargoes, or at least 130,000 bpd, were planned. A Dangote Group official, who did not wish to be named, said “some of the agreements have confidentiality clauses” without elaborating when asked about the NNPC supply deal.

Dangote Refinery and the Nigeria Stake

The Nigerian Dangote Refinery 650,000 barrels per day (BPD) integrated refinery project is located at Lekki free trade zone area of Lagos state. The project, which cost an estimated $19 billion to build, is Africa’s biggest oil refinery and the world’s biggest single-train facility. The integrated refinery and petrochemical project and is expected to generate 9,500 direct and 25,000 indirect jobs.

 The refined products output is expected to be more than enough to meet Nigeria’s fuel demands and turn Africa’s largest crude producer into an exporter of refined crude.

Nigeria has 20 percent equity investment share in the project and this was made known in June 2021, Mele Kyari, group managing director, NNPCL, when confirmed that the federal government would acquire a 20 percent equity stake in the Dangote Refinery.

Two months later, the federal executive council (FEC) approved the sum of $2.76 billion for the acquisition of a 20 percent minority equity stake in the refinery. The Nigerian 20% acquisition stake is believed to come in crude oil supply form which will come in tranches.

The eventual take off of the 650,000 barrels Dangote Refinery is save Nigeria the hard earned foreign exchange used in the importation of petroleum products which stood at $12.44 billion in October 2022. The Central Bank of Nigeria (CBN) has revealed that Nigeria spent a total of $12.44 billion on the importation of petroleum products between January and October 2022

The country inability to revitalise its four refineries ( currently on quiek fix maintenance) with a combined capacity of 445,000 barrels per day (bpd) after colossal amount is budgeted annually is a termed by most energy analysts as disgrace to a largest crude oil producer in Africa.